You need to address the inventory cost requirements.
What are two possible ways to achieve the goal? Each answer represents a complete solution.
NOTE Each correct selection is worth one point
A. Use FIFO with marking.
B. Create a costing version.
C. Set up commodity pricing.
D. Set up a costing sheet
E. Create purchase orders from sales orders.
Answer: A,B
Explanation:
Topic 2,
Overview
Organics Company Case Study
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Background
Best for You Organics Company started as a home-based business. The founders began making handmade soaps and bath products in their kitchen As sales increased, the business established a production facility and distribution center that supplies three retail stores.
Soaps and bath products are manufactured in the production facility and are stocked in the warehouse for distribution to the retail stores. Employees at retail stores use mobile point of sale (MPOS) tablet devices to sell the products to customers.
The company structure is a single legal entity with two sites as shown In the diagram below:
Current environment
Best for You Organics plans to introduce a new product line of face creams. Each product in the new line uses the same base ingredients but includes a different extract (for example, lime, avocado, kiwi). The marketing department is preparing to introduce the new product line. Minimal inventory will be held in the warehouse.
The company uses a cloud-based deployment of Dynamics 365 Supply Chain Management to manage finances for all company operations and locations. The company does not use Bill of Materials (BOM) versioning.
The production and warehouse facility is set up with the following organizational hierarchy:
External customers include:
* Customer A: a walk-in store customer (business-to-consumer)
* Customers: a customer with an existing account (business-to-business) External vendors include:
* VendorA a trucking company
* VendorB: a raw materials supplier
General
The new product line must be set up in the system and readily available for sale when the company introduces the product line to the public at an upcoming trade show.
Production
You must configure the system to produce the new products:
* Ensure that the warehouse stocks the minimum quantities of raw materials to produce the products,
* Use a single version per item.
* Implement FIFO inventory valuation methods.
* Track raw and finished goods using different General ledger accounts.
* Use a primary location to determine where to stock product in the warehouse.
* Configure alternate locations in the warehouse to hold overstock products and refill the primary location as-needed.
Shipments
You identify the following requirements related to shipping:
* Ship product to retail stores weekly.
* Stores require a packing slip to check in merchandise. Drivers require transport documentation and charge per mile to the stores.
* Shipments to Store1 must be scheduled for Monday. Wednesday, or Friday, Store1 will sometimes pick up their own deliveries when an order is small because they have their own van Shipments to Store2 and Store3 must be scheduled for Tuesday or Thursday.
* You must transmit Advance Shipping Notifications (ASNs) to the stores prior to deliveries.
* Set up the system configuration to allow for store transfers.
* Set up the system so that products may be shipped to the retail stores as bulk orders.
* Set up the transport providers to deliver products from the warehouse to the retails stores.
Reporting
Once the new products are available in stores, review 30 days of historical sales data from day-to-day transactions will determine the reorder quantities. Set up reporting to allow the product line to be costed and tracked independent of other items.
Pricing and inventory
You identify the following requirements related to pricing and inventory:
* Determine the Quantity of the new products that can be produced and ready for sale within the first 90 days. Ensure that specialty packaging is on hand for retail sales. The packaging must be shipped directly to the stores from the vendor.
* Stores must not inventory the packaging materials. Stores must maintain a 50-day supply of specialty packaging materials. Stores must reorder packaging materials as needed.
* Retail store customers must pay full retail price, Resellers must receive a 10 percent discount off the list price.